The Reserve Bank of India has released guidelines for what it calls the tokenization of debit and credit card transactions according to reports Tokenization will replace card details with a code called a token which will be specifically for the card the token requestor and the device being used to pay Instead of the cards details the token will act as the card at point of sale POS terminals and quick response QR code payment systems The goal of the process is to improve the safety and security of payments The bank has offered permission for the process using all types of payment services and methods including near-field communication NFC magnetic secure transmission MST in-app payment methods and cloud services The service would initially be used through smartphones and tablets but other devices might be added later the bank said To ensure the process is safe and secure RBI says that tokenization and de-tokenization should only be done by an authorized card network and the request should be logged and ready for retrieval if needed A customer shouldnt have to pay to use the service the bank added Card networks shall get the card issuers acquirers their service providers and any other entity involved in payment transaction chain certified in respect of changes done for processing tokenized card transactions by them the bank said RBI said that for banks and card payment networks there needs to be a way to do a periodic system audit at least once a year of all parties involved in the process of providing the service to customers Also RBI wants companies that issue the cards to make sure customers can easily report a loss of an identified device which might lead to unauthorized use of someones information or money Companies should not force the option or let a customer choose the option by default the bank said but the registration of the card as a token should be explicit through an additional factor of authentication AFA LATEST INSIGHTS Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation thats reshaping the payments and commerce ecosystem Check out the latest PYMNTS report on PSD2 Flytrex a six-year-old Israeli startup has raised 75 million in Series B financing according to a report in